Coles now trading on ASX as COL after demerger goes ahead

The Supreme Court of Western Australia has approved the demerger between Coles and Wesfarmers.

By November 21, Coles is expected to commence trading on ASX under the new ASX Code ‘COL’.

The move comes after Wesfarmers shareholders voted in favour of the proposed $20 billion demerger of the supermarket giant.

A total of 601,032,572 votes were cast in favour with 2,900,858 against.

READ: Wesfarmers plans to make Coles a separate company

A scheme booklet, announced in early October, detailed changes the demerger would bring.

With Coles now admitted to the official list of the ASX, the company will consist of three key divisions ­– supermarkets, liquor and convenience.

Coles’ net debt following the demerger will be about $2 billion, and its balance sheet is expected to support strong investment grade credit ratings.

In the booklet, Wesfarmers board chairman Michael Chaney said Coles’ turnaround over the past decade, and its strategy to ensure it remains a trusted brand for Australians, sees it well positioned to continue to grow as a mature defensive business with strong investment characteristics.

“We are committed to ensuring Coles is set up with a strong foundation for success and growth as an independent listed company,” he said.

From its origins in 1914 as a variety store in Collingwood, Victoria, Coles has grown to become a leading Australian retailer.

Sales in the Australian grocery and liquor industry have grown over the period of June 1985 to June 2018 by 6.2 per cent and 7.2 per cent per annum respectively.

Coles raises more than $7.1 million for drought appeal

Coles and its customers have contributed more than $7.1 million to the Country Women’s Association of Australia to help drought-affected farmers.

With Coles matching every donation dollar-for-dollar during August and September, customers and the supermarket chain have helped to raise funds for household and family expenses.

Coles also pledged $5m in grants or interest-free loans from the Coles Nurture Fund for farmers who have a project that will help them combat drought in the future.

Country Women’s Association of Australia board member Lyn Harris thanked Coles and its customers for their generous contribution which will go towards supporting drought-affected families where it is needed most.

READ: Climate adaptation project helps local producers cope with drought

Coles Store commercial and property director Thinus Keeve said the company is overwhelmed by the generosity of local shoppers across the country who have shown their support for Australian farming communities by donating at Coles checkouts.

“We are incredibly grateful for this tremendous contribution from our customers and team members who have gone above and beyond to raise funds for the Country Women’s Association drought appeal,” he said.

“[It] will go back to supporting local farmers, growers and producers who are experiencing hardship as a result of the drought,” said Keeve.

The Woolworths group also raised more than $7m for farmers and Harris Farm Market also donated to the drought-stricken communities.

Coles opens boutique style food store in Melbourne

Coles has opened its first smaller Coles Local store in Melbourne’s Surrey Hills.

The new look store, which opened on November 13, is about half the size of a full-size Coles supermarket – at about 1280sqm.

It has an in-store barista and chef, a food waste digester, 100 per cent Australian-grown fresh food, and a new range of Coles Local branded products including convenience meals.

Coles CEO Steven Cain said the new store gives the community the convenience of a supermarket with the character of a specialty store.

READ: Wesfarmers releases scheme booklet detailing proposed Coles demerger

“The great thing about Coles Local is that it makes life easier for our customers and helps them explore their love of food.

“Our customers have told us they’re often juggling shopping with a busy family and work schedule, so there will always be a friendly team member who can help them find the specialty products they want to take home for their families,” said Cain.

The new store offers an extensive vegetarian and vegan range, sweet treats and baked goods.

It has a zero edible food waste policy and features a food digester, which uses water and microbes to partly digest inedible food waste.

The waste is sent to a local waste water treatment plant where it is turned into renewable energy. All edible food waste will be donated to Australian charity SecondBite.

The store’s refrigeration system uses a closed-water-loop system and energy-efficient design.

It is part of Coles’ $120 million investment in Victoria over the next 10 months.

Coles said it will listen carefully to customer feedback on the Surrey Hills store as it plans the roll out of more smaller format stores in the coming years.


Amazon takes on the Australian food market

Amazon Australia is joining the food market by releasing a line of dry grocery products from October 17.

Items will include tea, coffee, biscuits and organic foods, and products from companies such as Arnott’s and Uncle Toby’s.

Amazon Australia country manager Rocco Braeuniger said since the launch of in December 2017, Amazon has been focused on growing its selection and services for Australian customers.

“We are delighted to add to the over 80 million products already available on the store with the launch of Pantry Food and Drinks, bringing greater convenience to customers, underscored by everyday brilliant value and fast delivery,” said Braeuniger.

READ: Wesfarmers releases scheme booklet detailing proposed Coles demerger

It is responding to the growing health food trend in Australia by including a number of health and organic food brands in its new range, Amazon explains.

Amazon has also introduced one-day delivery for some urban areas as part of the service in Australia.

German discount retailer Kaufland is also expanding into the Australian market.

The company is expected to open its first two hypermarkets in Australia in 2019 with plans to open 32 stores in Australia by 2023.

Kaufland currently operates more than 1250 stores across Europe.

Despite new competition coming to the Australian market, Coles saw growth in its total sales for the first quarter.

Coles’ supermarket sales were up 5 per cent in the 13 weeks to September 23.

Coles’ Little Shop campaign helped sales jump during the first quarter.

The food sales increase was 0.3 per cent up the corresponding period last year, and up on the previous quarter’s 1.8 per cent lift.

Wesfarmers releases scheme booklet detailing proposed Coles demerger

Wesfarmers Limited has released a scheme booklet detailing its proposed demerger of the Coles business.

The booklet was announced in early October, with the demerger expected to be completed in November 2018.

It is anticipated the proposed demerger will create a new top 30 company listed on the ASX, with leading positions in supermarkets, liquor and convenience.

If the demerger proceeds, and Coles is admitted to the official list of the ASX, new proposed Coles board and committee charters and key policies will apply from the date of listing on the ASX.

READ: Wesfarmers plans to make Coles a separate company

These charters and policies are summarised in the scheme booklet, which sets out the effects of the demerger, certain information required by law and all other information known to the Wesfarmers directors, which is material to the decision of Wesfarmers shareholders to vote in favour of, or against, the demerger resolutions.

Coles will consist of three key divisions ­– supermarkets, liquor and convenience.

Coles’ net debt following demerger will be about $2 billion, and its balance sheet is expected to support strong investment grade credit ratings.

Wesfarmers board chairman Michael Chaney said Coles’ turnaround over the past decade, and its strategy to ensure it remains a trusted brand for Australians, sees it well positioned to continue to grow as a mature defensive business with strong investment characteristics.

“We are committed to ensuring Coles is set up with a strong foundation for success and growth as an independent listed company,” he said.

Wesfarmers plans to retain a minority ownership interest of 15 per cent in Coles and a 50 per cent interest in the flybuys joint venture with Coles.

“This will support strategic alignment between Wesfarmers and Coles in relation to mutually beneficial growth initiatives, including in the areas of data, digital and loyalty, and support the continued development of flybuys by leveraging the combined Coles and Wesfarmers digital and data assets,” said Chaney.

From its origins in 1914 as a variety store in Collingwood, Victoria, Coles has grown to become a leading Australian retailer which sells everyday products including fresh food, groceries, household goods, liquor, fuel and financial services.

Sales in the Australian grocery and liquor industry have grown over the period of June 1985 to June 2018 by 6.2 per cent and 7.2 per cent per annum respectively.

As at 30 June 2018, Coles processed more than 21 million customer transactions on average each week, had more than 112,000 team members and operated 2,507 retail outlets nationally.

For the year ended 30th of June 2018, Coles had pro forma revenue of $39.3b and pro forma EBIT of $1,414 million.



RSPCA celebrates industry leaders in food services sector that use cage free eggs

The RSPCA has launched a nationwide campaign that focuses on Australia’s largest hospitality and food retailers who have switched to cage-free eggs.

The celebratory ‘Cage Free and Proud’ campaign recognises  brands such as McDonald’s, Subway, Grill’d Healthy Burgers, Nando’s, Harris Farm Markets, Arnott’s and IKEA, as industry leaders who have acted on consumer concerns and stopped sourcing eggs from battery cages.

They’re joined by national retailers ALDI and Woolworths, which have made the commitment to phase-out cage eggs in store by 2025, and Coles, which will phase-out cage eggs in store by 2023.

RSPCA Australia humane food manager Hope Bertram said the food services industry is the next frontier in the effort to rid Australia of battery cages.

READ: What eggs can teach us about traceability 

“While the cage egg industry and legislation lags behind, Cage Free and Proud is about positively recognising those businesses that have made the right decision by their customers and are helping free smart, social, egg laying hens from cruel battery cages,” said Bertram.

“The past five years has seen a significant shift in consumer buying behaviour, with cage-free eggs now leading the market share in the supermarket,” she said.

“However, there are still more than 10 million hens whose entire lives are spent in a barren wire cage, with space around the size of an iPad.

“The majority of those cage eggs aren’t going into household fridges; they are going into food services – such as cafes, restaurants and catering companies- as well as food manufacturing – packet mixes, mayonnaise, biscuits, cakes, and so forth,” said Bertram.

“Australians have voted with their wallets when it comes to buying cage-free cartons at the supermarket, and they want cage-free when dining out and buying premadeand pre-packaged food too.

“The commitment from these major brands shows there is no excuse for the continued use of battery cages,” she said.

“The future of egg production is definitely cage free. Through this campaign and beyond, we expect to see many more brands make the switch to cage-free eggs so they can also be Cage Free and Proud,” said Bertram.

The Cage Free and Proud campaign will be supported by a nationwide advertising and public relations campaign that includes print, outdoor, radio, television and digital advertising as well as communications activities.

Woolworths and Coles dominate Australia’s $2.9 billion fresh bread market

Australia’s $2.9 billion fresh bread market is dominated by the two supermarket companies –Woolworths Group and Coles Group.

These companies represent a combined 51.9 per cent of the fresh bread market, according to the Roy Morgan results for the year to June 2018.

In total, supermarkets now comprise more than two-thirds of the entire fresh bread market with the remaining 31 per cent split between specialty bread shops including Bakers Delight, Brumby’s Bakery, and between delicatessens, milk bars, convenience store and other stores.

Over the past eight years there have been three stand-out performers in the fresh bread market.

READ: Survey shows ALDI is the most trusted brand in Australia

Roy Morgan CEO Michele Levine said although Woolworths and Coles had the majority of the fresh bread market for more than five years, the success of Bakers Delight and Aldi in growing market share showed there was space for nimble competitors.

“The dominance of Australia’s two supermarket giants Woolworths and Coles is well known, with the two now comprising over half the Australian markets for fresh food including fresh meat, fresh fruit and vegetables and fresh bread,” she said.

“Although the two clearly dominate Australia’s fresh bread market, the growth this decade has been led by Coles Group which has significantly increased its market share by 6.2 per cent to 25.3 per cent, while Woolworths is little changed with 26.6 per cent of the fresh bread market,” said Levine.

German supermarket chain Aldi has grown its market share by 3.1 per cent to 7.1 per cent and specialty bread shop Bakers Delight now has a market share of 13.6 per cent, up by 0.5 per cent from June 2010.

“There are two competitors in particular outside the ‘Big 2’ who have grown their share of the fresh bread market and they come from very different origins. Aldi has made a huge impression on the Australian marketplace since opening its first store just over 15 years ago,” said Levine.

“Aldi’s success has been built upon not only discount prices but also a reputation for reliability, meeting the needs of consumers and being honest about what it has to offer. Aldi has consistently rated as one of Australia’s most trustworthy brands including retaining its spot as Australia’s most trusted brand in this week’s Roy Morgan Net Trust Score survey for July,” she said.

Despite facing a resurgent Coles in recent years Woolworths has retained its title as Australia’s largest retailer of fresh bread capturing a market-leading 26.6 per cent of the fresh bread market.

Other outlets for fresh bread including IGA and other supermarkets as well as Brumby’s Bakery and other smaller bread shops and delicatessens, milk bars, convenience stores have also experienced declines in their share of the fresh bread market of 1 – 2.4 per cent.

These results are from the Roy Morgan Single Source survey of more than 50,000 people per annum, including more than 12,000 grocery buyers.

Roy Morgan recently analysed the state of the overall grocery market in Australia, which is valued at more than $100 billion per annum. The latest results show Woolworths and Aldi have been the two best performers in the last year with both gaining significant market share. Further analysis, including the shares of the major supermarkets of the overall fresh food market.


Supermarkets match customer donations dollar-to-dollar to help farmers

Supermarkets in Australia continue to provide farmers with help during the drought, including Coles with its pledge to match customer donations dollar-for-dollar.

Coles’ promise to match customer donations will go for the entire month of August, in order to help farming communities doing it tough due to drought conditions.

The combined donations raised at checkouts and matched by Coles will be provided to the Country Women’s Association to support drought-affected families, to help cover household expenses such as school expenses and food, medical, electricity and water bills.

Coles managing director John Durkan said customers wanted to do more to support families affected by drought.

READ: Sheep and cattle slaughter increases to reduce stock numbers during drought

“For every donation no matter how big or small, our customers can be assured they will be making a difference to the rural communities experiencing hardship and distress,” said Durkan.

The matching donation  is in addition to $5 million already pledged in grants or interest-free loans from the Coles Nurture Fund for farmers who have a project which will help them to combat drought in the future.

Harris Farm Markets also announced it is matching donations dollar-to-dollar in August.

In a release, Tristan Harris, from Harris Farm Markets, said farmers deserved a fair grow and they needed people’s support in these trying times.

From the 2nd of August the supermarkets had donation boxes in all its shops collecting funds for rural aid, for four weeks.

Harris Farm Markets also had a cook-up at all stores in the first weekend of August, selling food for $5 with all proceeds helping provide hay and stock feed for drought-stricken farmers.

On the 11th of August, Woolworths donated all profits from sales in the fresh departments at its supermarkets to the Rural Aid Buy a Bale appeal.

It followed a $1.5 million donation from Woolworths, in July, aimed at supporting farmers impacted by the drought.




Coles announces $5 million to help farmers combat drought

Coles is providing $5 million in grants and interest-free loans from its nurture fund to help farmers across Australia combat drought.

In the past year, Coles also provided more than half a million dollars in grants to farmers who applied to the Coles nurture fund to implement initiatives to make them less dependent on rain.

In Coolac, New South Wales, Michael Crowe from Gobarralong Valley Beef used a $400,000 Coles grant to build facilities to manufacture a nutritious animal fodder indoors – making him less dependent on grass and water.

At Oxley Flats in Victoria, Nigel and Hannah Stephens received a $134,000 grant to install a more efficient irrigation system so they could reduce their water use and grow grass-fed beef all year round.

READ: NSW government offers more funding for drought-stricken farmers

Coles also launched a fundraising appeal at the end of July at its checkouts for people to support farmers struggling with the effects of drought.

All funds raised at the checkout will be provided to the Country Women’s Association to provide support to drought-affected families to help cover household costs such as school expenses and food, medical, electricity and water bills.

Coles managing director John Durkan said Coles was keen to do more to support families affected by drought.

“Many of our team members at stores in drought affected communities have heard harrowing stories from customers about the impact of the drought,” he said.

“Our store teams in these communities have helped by collecting donations of non-perishable food or providing gift cards but we wanted to take action at a national level to help more families facing hardship right now and to help farmers to combat drought in the future,” said Durkan.

Coles’ support will involve a fundraising appeal whereby customers can donate $2, $5, $10 or an amount of their choice at any Coles checkout across Australia, and $5 million in grants or interest free.

The company is also supporting its grass fed beef suppliers by buying their livestock as grain fed beef if the farmers have been forced to feed grain to their cattle during the drought.

Coles switches to recyclable and renewable meat packaging

Coles is introducing meat packaging made entirely from a combination of recycled and renewable material.

The new packaging will be used for a wide range of its Coles brand fresh meat and poultry products.

Coles bought about 121 million recyclable meat and poultry trays, in 2018, from Australian manufacturer Plantic Technologies.

Coles will use Plantic’s barrier trays, made from recycled polyethylene terephthalate (PET), along with a thin layer of Plantic’s renewable barrier material to help keep the meat fresh.

READ: Coles and Woolworths still lead fresh fruit and vegetable market

During the recycling process, the thin plant starch layer washes away, allowing the PET tray to be recycled.

Coles director of fresh produce, Alex Freudmann, said it was an important step in Coles’ goal to become more sustainable.

“For four years, our Coles brand beef, lamb and pork mince has been packaged in recyclable trays sourced from Plantic. We now want to take the next step by transitioning a wider range of our fresh meat and poultry trays to Plantic’s new packaging, so that it is not just recyclable but also made from recycled plastics and renewable plant materials including corn,” he said.

“We understand the important role that packaging plays in maintaining food safety, supporting product longevity and reducing food waste. At the same time, we are committed to reducing our impact on the environment and continue to look for opportunities to increase the content of recycled material in Coles brand packaging and improving recycling communication to customers on pack,” said Freudmann.

Plantic’s materials carry the Australian Recycling Label, which provides consumers with information on what packaging can be recycled and whether it can be recycled in kerbside recycling.

Plantic Technologies CEO Brendan Morris said the company saw the partnership with Coles as a defining opportunity to strengthen the local recycling industry.

“The problem in Australia is that there hasn’t been lot of processing of kerbside recycling done on-shore. Instead we’ve been sending it to China. As a result, there has been little investment to reprocess the waste within Australia and there’s not enough capacity here. At the same time, Australia is importing plastic into the country that can’t be recycled. These two factors combined means the waste is just piling up,” he said.

“Plantic decided that if we’re really committed to this and want to make a benefit to the environment and make a real difference then we need to start now, with Coles supporting us.”

Coles aims to make all Coles brand packaging recyclable by 2020.

Coles and Woolworths still lead fresh fruit and vegetable market

Analysis of long-term market trends by analysts at Roy Morgan shows that in 2018 Australia’s two largest supermarkets captured more than 51 per cent of Australia’s $18 billion fresh fruit and vegetable market between them.

According to market analysts, Roy Morgan, the Woolworths Group with a 27.4 per cent share, up 1.3 per cent points since 2017, and Coles Group with a 23.9 per cent share, down 0.7 per cent points, had a combined share of the fresh fruit and vegetable market larger than all other retail outlets including rival supermarkets Aldi and IGA, fruit shops, markets, other supermarkets and other non-supermarkets combined.

Woolworths enjoyed stronger growth in the fresh fruit and vegetable market over the past year than rival Coles, who despite increasing their number of buyers in an average seven day period had a decrease in the share of market.

Third largest supermarket Aldi now has a 10.1 per cent share of the fresh fruit and vegetable market, up 0.6 per cent in a year – although all three have taken substantial market share from traditional fruit shops. Aldi is fast approaching as the third major supermarket group set to overtake fruit shops, which currently account for 15.8 per cent of the market.

Majority of fresh meat now bought at Coles & Woolworths

Analysis of long-term market trends shows that for the first time in 2017 Australia’s two largest supermarkets captured more than 50% of Australia’s $13 billion+ fresh meat market between them.

Market leader Woolworths Group with a 26.5% share, up 1.1% points since 2016, and Coles Group with a 24.3% share, up 2% points, had a combined share of the fresh meat market larger than all other retail outlets including rival supermarkets Aldi and IGA, butchers, markets, other supermarkets and other non-supermarkets combined.

Both Australian supermarket giants have enjoyed stronger growth in the fresh meat market over the past year than rival Aldi which now has a 9.6% share of the fresh meat market, up 0.9% in a year – although all three have clearly taken substantial market share from traditional butchers.

Ten years ago butchers and markets had nearly a third (32%) of Australia’s fresh meat market. Today this is just under a quarter (24%) of the fresh meat market is now held by butchers and markets.

In the last 12 months fresh meat market share for butchers and markets dropped 3% points. This is steepest drop of any time period in the last decade.

These results are from the Roy Morgan Single Source survey of over 50,000 people per annum, including over 12,000 grocery buyers.

Michele Levine, CEO, Roy Morgan, says Australia’s increasingly competitive fresh meat market is squeezing the market share of the traditional Australian butcher:

“Australia’s ‘Big Two’ supermarket chains Woolworths and Coles now capture over 60% of Australia’s $100b+ grocery market. In recent years the Big Two have been moving to consolidate their market shares in various fresh food markets including fresh fruit & veg, fresh meat, fresh bread, fresh deli and fresh seafood,” she said

“In just the past year Coles and Woolworths achieved a milestone, capturing a majority of the fresh meat market for the first time and now hold 50.8% of Australia’s fresh meat market between them. Woolworths’ fresh meat market share of Woolworths has increased 1.1% points over the past year to 26.5% while Coles has continued a decade long-trend by increasing its market share by 2% to 24.3%.

Australian fresh meat market 2016 v. 2017


Source: Roy Morgan Single Source Australia, January 2016 – December 2016, n=8,301, January 2017 – December 2017, n=8,691. Base: Last 7 day fresh meat purchasers aged 14+ weighted to Australian households.

Wesfarmers plans to make Coles a separate company

Wesfarmers has announced its intention to demerge its Coles division, subject to shareholder and other approvals.

It is anticipated that the proposed demerger would create a new top 30 company listed on the Australian Securities Exchange, with leading positions in supermarkets, liquor and convenience, strong cash generation capability to underpin dividend distributions, and an earnings profile which is expected to be resilient through economic cycles.

The decision follows a review of the Wesfarmers portfolio and an assessment of the composition of its capital employed to support higher levels of future growth and total shareholder returns. As at 31 December 2017, Coles accounted for approximately 60 per cent of the Group’s capital employed and 34 per cent of Group divisional earnings.

Wesfarmers Managing Director Rob Scott said the Group was repositioning its portfolio to target a higher capital weighting toward businesses with strong future earnings growth prospects.

“Wesfarmers acquired Coles as part of Coles Group in 2007 and since then has successfully turned around the business and restored its position as a leading Australian retailer,” Scott said.

“We believe Coles has developed strong investment fundamentals and is of a scale where it should be operated and owned separately. It is now a mature and cash generative business, which is expected to have a strong balance sheet and dividend paying capacity. Coles will be well positioned to continue to deliver long-term earnings growth, with an earnings profile that is expected to be resilient through economic cycles.

“A demerger of Coles will facilitate greater focus by Wesfarmers on growth opportunities within its remaining businesses and the pursuit of value accretive transactions. The capacity to act opportunistically will be retained through a strong balance sheet and a cash generative portfolio. The Group expects to retain its current strong credit ratings and the dividend policy will remain unchanged.”

Wesfarmers Chairman Michael Chaney said the demerger would extend the Group’s long history of actively managing its portfolio.

“Wesfarmers’ operating model has benefited our shareholders over the long term and will continue to provide the framework for future capital allocation decisions,” Chaney said.

Wesfarmers post the proposed demerger Wesfarmers’ remaining operating divisions include a number of world-class businesses and leading Australian brands, including Bunnings, Kmart, Officeworks, and its Industrials portfolio.

The remaining divisions in Wesfarmers, excluding Resources, delivered compound annual growth in earnings of 8.9 per cent since FY2009 and generated a return on capital, excluding significant items, of 23.6 per cent, as at 31 December 2017. Organic and inorganic growth opportunities position these businesses well to deliver continued growth in earnings and returns.


Usain Bolt brings new hot sauce to Australia

Superstar sprinter Usain Bolt has teamed up with Coles supermarkets to create a line of hot sauces launching this week across Australia.

Rolling out in Coles supermarkets, the release of the line marks the first time Bolt has collaborated with a supermarket to develop a product.

Usain’s Insane Hot Sauce is available in three fiery flavours, all inspired by family recipes – Mango & Three Chilli, Pineapple & Jamaican Spice and Original Jamaican Spice.

The sprinter said the range was created to celebrate his passion for spicy food and bring a touch of Caribbean heat to everyday dishes.

“As I travelled the world I realised that Caribbean food was not readily  available outside places like the US, and I wanted to bring these special flavours to Australia,” he said.

“I love coming to Australia and have visited many times, so I wanted to develop a product that lets Australians experience real Caribbean flavours. The sauces can be added to anything, from chicken, pork or beef, to potatoes and rice to give any dish a true Jamaican twist.

“Thanks to Coles, these sauces are my first product to hit supermarkets and I hope people like it.”

Coles Chief Customer Officer, Simon McDowell, said the retailer was ecstatic to extend its relationship with Usain Bolt after he was recently announced as a Coles Sports for Schools ambassador.

“This partnership has been very exciting for us and for our customers. Not only are we bringing new and innovative products to our customers, we’ve been able to develop the products in collaboration with much-loved local Aussie supplier, MON Natural Foods.

“We are committed to supporting local businesses, so we are proud have MON Natural Foods on board to produce Usain’s hot sauces for our customers to try,” he said.

MON Natural FoodsBusiness Manager, Joshua Green said his team maintained a strong commitment to investing in locally sourced products since the family took over the business in 2012.

“We are excited to be partnering with Coles and Usain on these exciting new products which use as many Australian ingredients as possible,” he said.

“Thanks to our growing partnership with Coles we have doubled our production over the last three years, meaning we’ve been able to increase our local workforce from 30 to over 55 people.”

Coles expands grass-fed beef range

Customer demand for high quality, grass-fed beef has resulted in a doubling in the number of Aussie farmers required for the national launch of Coles’ grass-fed range at all supermarkets this week.

With Coles’ research revealing 79 per cent of customers want meat that comes from animals raised and fed naturally, Coles is now offering a beef range which comes entirely from cattle that graze freely on grass.

Labelled as Graze, the range has expanded from selected stores in New South Wales and Victoria to all States and Territories in Australia.

Coles Livestock Manager, Steve Rennie, said the popularity of the range had resulted in Coles sourcing beef from more than 300 Australian farming families so customers across Australia could try it.

“Grass-fed beef has long featured on menus at top steak restaurants and now customers can serve up Aussie grass- fed beef on their menus at home,” Rennie said, “Due to the overwhelming response from customers enjoying the quality and flavour, and with many requests for more products, we’ve been working hard to be able to supply this range to more Australians.

“For years we have been focused on providing our customers great quality beef at great prices. We are proud to be the only national supermarket to guarantee no added hormones and provide a grass-fed beef range.”

The Graze program requires all farmers to be independently assessed by industry auditor AUS-MEAT to ensure they are meeting the rigorous standards in animal husbandry and pasture management. Unique to the industry, the Graze program also specifies cattle are never fed grain to supplement their diet even in challenging weather conditions.

The expansion requires sourcing from different locations at different times of the year to suit changing seasons, with farmers across most States now supplying Coles with grass-fed beef.

Available from today, the range features around 10 products including porterhouse, scotch fillet, mince, burgers, sausages, stir fry, as well as meatballs.


When customers benefit from price wars

Prices between Coles’ and Woolworths’ private label brands and those at discounter Aldi have gone down by as much as 70 per cent in the past two years. According to the AFR, this reflects the major chain’s $1.6 billion investment into reducing prices.

At the moment, many private labels are under 10 percent pricier at Coles or Woolworths than one in Aldi. This is in comparison of the price gap of 23 per cent when Choice conducted a similar survey two years ago. This is reported as part of the larger strategy of neutralising competition from Aldi by trimming the prices of private label brands to appeal to bargain-hungry shoppers. Coles and Woolworths have also re-engineered their private label ranges to better compete with Aldi, improving packaging and product formulations to overcome consumer perceptions that their own-brand groceries were inferior to those at Aldi.

In addition, the price gap on leading national brands has also fallen, from 99.5 per cent at Coles in 2015 to 66 per cent in 2017, and from 101.6 per cent at Woolworths to 64.6 per cent, according to AFR.

 Even though Aldi still remains the cheapest option, the price differential has narrowed significantly across the board as the major chains attempt to claw back market share from the discounter, which is now estimated to account for about 10 per cent of food and grocery sales on the eastern seaboard.

 Citigroup analyst Bryan Raymond said Coles and Woolworths were attempting to minimise the loss of customers to Aldi by demonstrating better value with a mix of national and improved private label brands.

“In some respects it’s about slowing (Aldi’s) growth,” Mr Raymond said.

“Aldi has made material market share gains and Woolworths and Coles need to be careful they don’t lose shoppers because they don’t have a good value offer – they’ve made good progress on that over the last two years.”

 “Aldi is still growing but the loss of customers from Woolworths and Coles has moderated and some of that is rightly attributable to their private label positioning,” he said.

 According to Coles managing director, John Durkan , Coles was prepared to cut prices ahead of cost savings to ensure the supermarket chain stayed cheaper than Woolworths, which has invested about $1 billion into prices over the last 18 months.

“We’re going to carry on investing in lower prices to make sure we do what we said we’d do, which is to be the cheapest supermarket,” Mr Durkan said.

“We’re going to do it in a measured way [and] eventually our cost savings will pay for our investment in our business.”

QLD woman finds Redback spider in broccoli from Coles

A Townsville woman has discovered a female Redback spider, hiding in a head of broccoli she bought from Coles.

According to the Townsville Bulletin, Tamahra Moore purchased the vegetable from Coles North Ward.

“I was chopping all my vegies up for the week when I saw a flash of black and red, the bloody thing just crawled out,” Moore said.

“I would have probably been better off with takeaway, as I quite easily could have been bitten.”

She said she called the supermarket to report the find, but the staff member she spoke to didn’t believe the story. So she put the broccoli and spider into a container and brought it back to the supermarket.

“They got the produce manager who said he had heard about it but had never seen it. He asked to keep it so he could show the distribution centre team and I said ‘that’s fine’, I didn’t know what to do with it,” said Moore.

A Coles spokeswoman told the Townsville Bulletin there are procedures in place to avoid these sorts of incidents. The company’s national quality team is investigating the issue.

Wesfarmers profit up as new MD revealed

Wesfarmers half-year profit has increased by 13.2 per cent, while earnings for its Coles supermarkets dropped for the same period.

The company reported a net profit after tax of $1,577 million for the half-year ended 31 December 2016. In addition, earnings per share increased 12.8 per cent to $1.40 per share, and return on equity (R12) increased 20 basis points to 10.2 per cent.

The result reflected good performances by its Bunnings, Kmart and Officeworks chains. In contrast, earnings for Coles supermarkets fell 2.6 per cent to $920 million.

Meanwhile, the company yesterday announced that Rob Scott (pictured) will be the next Wesfarmers Managing Director, succeeding Richard Goyder who will step down towards the end of 2017 after more than 12 years in the role.

Scott becomes the Group’s Deputy Chief Executive Officer effective immediately and will join the Board as Managing Director at the conclusion of the 2017 Annual General Meeting in November. He will maintain his current role as head of Wesfarmers’ Industrials division until 1 July 2017.

Aldi cheaper for some goods than Coles, Woolworths

Shoppers at Aldi are paying on average 14 per cent less than those at Coles and 12 per cent than those at Woolworths for the same goods, according to a study.

The study by Fairfax Media found that, of 125 branded products available from an Aldi store in one suburb, 36 were also available in neighbouring Coles and Woolworths stores.

The products included in the comparison included Coke, Tim Tams and Weet-Bix.

Paul Foley, an ex-Aldi executive explained how Aldi can offer cheaper prices on these goods.

“The brands they stock are generally those where either the quality available from private-label suppliers is inferior and not comparable, like [laundry detergent] OMO, or the marketing behind that brand is so huge that the consumer demands it, like the cola from Coke,” he said.

“However the deal between the supplier and Aldi is; first Aldi will take a larger pack size, often a pack size that is exclusive to Aldi so some economy is represented here and that Aldi does not embarrass other bigger retail customers (Woolies and Coles) of the brand with its selling price.

“Inevitably this means the discount per kilogram or litre on these branded items is nowhere near the discount Aldi offers on private label items.

However, according a Coles spokesman, the survey did not represent normal consumer behaviour or an average shopping basket.

He told the SMH that promotional specials can make products at Coles much cheaper than competitors.

Coles wins injunction to stop picket line

Coles has won a temporary Supreme Court junction to stop workers picketing a cold storage warehouse in Melbourne.

As AAP reports, the 650 workers walked off the job indefinitely on Tuesday and are demanding increased pay and improved job security.

The workers, who are represented by the National Union of Workers (NUW) are making the demands of Polar Fresh, which operates the Truganina facility on behalf of Coles.

Paul O’Grady, acting for Coles, told the court the picket line was preventing trucks from exiting not only the Truganina site but also other nearby sites at Derrimut and Laverton North, which had been set up to allow the business to keep operating.

Workers from those extra sites are not involved in the dispute.

“This is a specific targeting of Coles trucks,” O’Grady told Court on Tuesday afternoon. “One can infer it is to apply pressure to Polar Fresh through Coles.”

While the court heard the industrial action at Truganina was approved by the Fair Work Commission,  Justice Michael McDonald ordered the workers remove the picket line.

The matter will be revisited on Monday.

As the ABC reports, Curtly Tuala from the NUW earlier said the workers need better job security.

“We want a zero-casual site. We want a sense of security for the workers,” he said.

“They deserve a sense of security because we know what it would enable the workers to do, looking after a family and your kids and providing for them.”

Image: SMH